Qantas to Invest $80 Million Into Customer Service to Win Back Public Trust

A man checks in on arrival at the Qantas domestic terminal at Sydney Airport in Australia on Aug. 25, 2022 in Sydney. Lisa Maree Williams/Getty Images

Qantas is aiming to win back the heart of the nation with a $80 million investment in customer improvements.

The news comes after new Qantas CEO Vanessa Hudson apologised to customers last week amid multiple challenges for the airline.

On Sept. 25, the company revealed it plans to address “customer pain points” with the multi-million dollar funding.

New changes will include lifting the number of frequent flyer point seats, improving catering on flights, and dealing with contact centre issues.

“This additional investment is aimed at addressing a number of customer ‘pain points’ through improvements such as better contact centre resourcing and training, an increase in the number of seats that can be redeemed with Frequent Flyer points, more generous recovery support when operational issues arise, a review of longstanding policies for fairness and improvements to the quality of inflight catering,” Qantas said in a market update (pdf).

The airline will use company profits to fund the investment, on top of the $150 million the company already budgeted for the 2024 financial year.

The Qantas share price fell 1.22 percent during trading on Sept. 25 and is now sitting at $5.245 at the time of publication.

Fare Price Review?

Qantas flagged that fare prices could be under review amid higher fuel prices.

The carrier noted fuel prices have jumped 30 percent since May 2023, including a 10 percent hike since August.

Higher oil prices, larger refiner margins and a lower Australian dollar have driven this fuel price hike, Qantas noted.

“The group will continue to absorb these higher costs, but will monitor fuel prices in the weeks ahead and, if current levels are sustained, will look to adjust its settings,” Qantas said.

“Any changes would look to balance the recovery of higher costs with the importance of affordable travel in an environment where fares are already elevated.”

A photo taken on Aug. 20, 2023, shows a line-up of Qantas planes at Sydney's Kingsford Smith Airport. William West/AFP via Getty Images

Qantas said its fuel bill in the first half of the financial year 2024 is now expected to jump by $200 million to $2.8 billion after hedging.

However, Qantas noted it is in a “very strong financial position” including debt levels and “continued strong revenue intakes.”

Travel Demand ‘Strong’

Despite recent woes, Qantas said travel demand “remains strong” and said trading conditions are similar to those in the final quarter of the 2022-23 financial year.

Qantas and Jetstar are predicting more than 4 million passengers will travel with the airline during the September-October school holidays and footy finals.

The company is expecting to fly 35,000 domestic and international services during this time period, up from 28,000 at the same time last year.

Recent Drama

Qantas CEO Hudson apologised to customers in a video statement on Sept. 22.

“I know that I have let you down in many ways, and for that I am sorry,” she said.

The new CEO was recently ordered to attend a mediation with the Transport Workers Union to work out compensation for 1,700 workers who were sacked during COVID-19. A High Court ruling two weeks ago unanimously found Qantas had illegally outsourced the ground handling jobs.

This follows former CEO Alan Joyce leaving his position two months early amid legal action from the Australian Competition and Consumer Commission (ACCC). Qantas allegedly sold 8,000 tickets for plane flights that had been cancelled.

Qantas has also received criticism for joining the corporate “Yes” campaign for the Indigenous Voice to Parliament and flying three aircraft with a “Yes23” campaign logo.

ANZ, Wesfarmers, Woolworths and Rio Tinto are among the corporate entities backing the referendum.